Luxembourg hits record of €3.7trn AUM despite Brexit jitters

Added 17th February 2017

Assets under management in Luxembourg-domiciled funds grew by 7% to €3.74trn (£3.18trn, $3.97trn) last year, the latest data from the Association of the Luxembourg Fund Industry (ALFI) shows.

Luxembourg hits record of €3.7trn AUM despite Brexit jitters

The industry body said, although Luxembourg has long been considered a Ucits fund hub, ALFI has seen increasing interest from asset managers of private equity, real estate and hedge funds since the introduction of the Alternative Investment Fund Managers Directive (AIFMD) in 2011.

“These record figures and the strong net sales that we continue to see demonstrate that Luxembourg remains a preferred global fund hub,” said Denise Voss, chairman of Alfi.

Voss described 2016 as a “challenging year” after the Brexit vote brought uncertainty to cross-border distribution in Europe, with the possible loss of both fund and fund manager passports for UK asset managers. 

“Second we have seen the threat of US protectionism with the election of Donald Trump.

“However, these challenges can bring opportunities.  UK asset managers, and those asset managers from other non-EU countries who currently use the UK to access investors in Europe will, once the UK leaves Europe, have to domicile their funds in an EU member country,” added Voss.

“Luxembourg continues to be one of the most sought after EU countries for setting up investment funds and fund management companies and clearly this will continue throughout the Brexit process. 

M&G Ucits fund

Voss also confirmed that M&G, one of the largest UK asset management firms, is seeking permission from the Luxembourg authorities to launch a new Ucits fund. 

“We understand other firms will make public similar plans in the next weeks and months,” she added.

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Monira Matin

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Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.

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